Here’s why Capitec and others were fined millions by the Prudential Authority

The Prudential Authority (PA), a regulatory body under the South African Reserve Bank (Sarb), has imposed administrative penalties, including fines, on Capitec Bank, Albaraka Bank Limited, and Ninety One Assurance Limited. The PA's role is to ensure financial institutions comply with the Financial Intelligence Centre Act 38 of 2001 (FIC Act) and any orders made under it. The fines were a result of non-compliance with the FIC Act provisions.

Capitec Bank received fines totalling R28 million, with R5.5 million conditionally suspended for 36 months. The PA found that Capitec failed to conduct adequate customer due diligence, enhanced due diligence, and ongoing due diligence on sampled client files. Additionally, the bank was penalised R3 million for not providing ongoing training to employees and for not obtaining management approval for its anti-money laundering screening manuals. Capitec was also warned not to repeat the conduct leading to non-compliance.

Albaraka Bank Limited faced sanctions for non-compliance with certain provisions of the FIC Act, following an inspection in 2021. The PA imposed three cautions not to repeat the conduct, and a financial penalty of R1.6 million, with R440,000 conditionally suspended for 36 months. Albaraka failed to report cash threshold reports and suspicious transactions, and did not document risk factors, trigger events, prohibited industries, and activities in its RMCP.

Ninety One Assurance Limited, a registered long-term insurance company, was fined R6 million for non-compliance with the FIC Act. The PA imposed two cautions not to repeat the conduct, two reprimands, and a financial penalty with R2.5 million conditionally suspended for 36 months. Ninety One was found to have failed to develop, document, maintain, and implement an RMCP to identify, assess, monitor, and manage its risk related to sanctions screening, prominent influential person screening, and customer relationships.